Budget 2018: Chambers call for consistent policies

With less than a month to go for the presentation of the 2018 Budget, business chambers have voiced concerns on gender discrimination, flexible working hours for women and safeguarding local industries through clear and consistent policies.

Women’s Chamber of Industry and Commerce Chairperson, Chathuri Ranasinghe said the Chamber has called upon the policy makers to take measures to increase the participation of women in the country’s labour force which is currently at an unsatisfactory level.

According to the International Labour Organisation (ILO) estimates of 2015, the rate of labour force participation among women in Sri Lanka is around 35.9 percent which implies that a disproportionate majority of women remain outside the labour market, with no access to wages, pensions and other benefits tied to gainful employment.

“We have been lobbying for more women’s participation in the political and economic spheres of the country. However, so far there has not been a satisfactory response.

WCIC expects the 2018 Budget to address the issue and recognize the role of women in all spheres of society,” Ranasinghe said.

As defined by the ILO, labour force participation is a measure of the proportion of a country’s working-age population that engages actively in the labour market, either by working or actively looking for work.

Empirical evidence on the negative outcomes of gender asymmetries in the labour market is extensive and underscores the positive nexus between female labour force participation (LFP ) and economic development.

For instance, studies such as Cuberes and Tiegner (2015) demonstrate the extent to which gender gaps negatively affect per-capita income and productivity; according to their findings, gender inequality creates an average income loss of 16% in the short-run and 17.5% in the long-run for developing countries.

In Asia alone, UNESCAP estimates that restrictions on women’s access to employment opportunities result in a loss of $42–47 billion per year. Other studies also highlight significant losses to GDP that occur due to gender asymmetries in the labour market; an IMF staff note estimates an average loss of 20% to the Sri Lankan economy stemming from lower participation rates among women .

WCIC has called upon the government to make flexible working hours for women mandatory in workplaces that will contribute to higher productivity and satisfaction in employment.

“We have proposed eight working hours for women according to their convenience so that home and office work are both attended to,” Ranasinghe said. Many offices in the private sector offer flexible working hours for homemakers to ensure job satisfaction and better output at work.

“My office provides flexible working hours for women during and after maternity which has helped both the employee and the workplace,” Ranasinghe said.

She said the Chamber has proposed incentives to establish more day care centres across the country to enable more women to engage in work.

“Our vision is to help urban and rural women to develop their entrepreneurial skills to better their living standards and support economic growth in the country,” Ranasinghe said. WCIC has proposed a specific percentage of government procurement to be allocated for women entrepreneurs.

The allocation of contracts for women is not substantial. We expect the 2018 Budget to look into this aspect too,” WCIC chairperson said.

The WCIC and all organization working for women’s rights have urged the authorities to increase the number of women in local government bodies which is currently around two percent of the total population.

Women account for around 52 percent of the total population in the country.

Sri Lanka Chamber of Small Industries ( SLCSI) Mohideen Cader said the chamber has requested through its budget proposals, to permit foreign direct investments which brings only new technology, expertise and new export markets that supports the local economy.

He said there is no point in allowing FDIs that replicate local industries. Such moves will be detrimental to local industries.

Around six industries have been adversely affected due to lack of clear policy direction according to the chamber.

A textile factory manufacturing school uniforms and a shoe factory at the Katunayake FTZ were closed down due to ad hoc policies.

“We have also requested that the taxes be simplified and borrowing rates to be brought down to enable small and medium scale entrepreneurs to expand their enterprises,” Cader said.

The Chamber proposes that measures to facilitate readjustments and relocation, training, providing machinery and investments by the government must be clearly spelt out. It further states that local governments should be geared to implement anti dumping laws.

The Ceylon Chamber of Commerce in its recommendations for the 2018 Budget states the Economic Service Charge (ESC) rate to be brought down to 0.25 percent while the period for carrying forward balances to be increased from three to five years. If the ESC rate is to be kept at 0.5%, the period for carrying forward balances to be reduced from five to three years.

It recommends to introduce a monthly payment date (e.g 20th day of a month) for all types of business to simplify the VAT calculation and payment process.

The Tourism development levy (TDL) is collected from the sector with the intention of using the same for destination promotions and development of Tourism industry.

The cumulative of the TDL funds collected over the past years account for a significant amount and is available to be utilised for promotional campaigns.

The chamber recommends that the funds collected through TDL is used for the intended use, promoting Sri Lanka as a tourism destination.

CCC states that tax contributions should be given back for the development of the aviation industry and to enhance the facilities at the airport. Hotels over 10 years and 10 rooms and above to be given low interest loan subsidy of Rs. 2 million per room for refurbishment and selected construction materials to be exempt from PAL, and cess.

It recommends that VAT and price control imposed on milk powder are removed and a Special Commodity Levy (SCL) is introduced per kg basis (Eg Rs. 25 per kg). It further recommends that the Milk Powder Industry and GOSL to meet on a quarterly basis to determine the SCL charge based on actual clearances.

Reconsider to increase the loan to value (LTV) ratio up to 70 percent which would be beneficial for non-bank financial institutions (NBFIs) and customers.

Implementation of the Rubber Master Plan: Chamber of Construction Industry, Sri Lanka President Ranjith Gunatilleke said the construction cost especially for high rise building in Sri Lanka is high compared to many countries in the region. It is even higher than Dubai, Singapore and Malaysia because, except for sand and metal, the rest of the construction material is imported. Even the cost of sand in the country is four times higher than the price in India.

“We request the authorities through the next budget to adjust the Cess in such a way that it reflects the world market prices so that it will fair by end users who have to pay for taxes in addition to the high prices of building material,” Gunatilleke said.

Ceylon National Chamber of Industries Chairman Raja Hewabowala said the Chamber hopes the government will implement the proposals such as imposing anti dumping laws, erecting of incinerators for industrial waste disposal.

The Chamber recommends that cess be imposed on certain locally manufactured products to protect the local industry.